JPMorgan says a flurry of high-profile stock market debuts this year from the likes of Uber and Pinterest will not materially change the net supply picture; its data shows listings worldwide are down 20-30% year-to-date while buybacks should clock in around $1 trillion over the course of 2019.
Goldman Sachs meanwhile predicted Wall Street would enjoy its best year since 2013, even as it cut earnings estimates.U.S. buybacks have lost some momentum, perhaps as the impact of massive tax cuts fades. New stock buybacks averaged just $2.8 billion daily in the last three weeks, according to Trim Tabs Research, the second-lowest volume in the past eight earnings seasons. The number of announcements stood at 3.1, the lowest in the past eight earnings seasons.
“It is attractive for European companies to issue debt or take out bank loans for buybacks and they could have been doing it for years. It’s similar in Japan, they have been enjoying zero interest rates for even longer,” Panigirtzoglou said. There are also signs that Japanese firms, notoriously stingy with buybacks, are joining the party: Buybacks hit a record 6.5 trillion yen-plus in the fiscal year to April 1 2019 and Goldman Sachs predicts a further 20 percent increase in the year to April 2020.
Oiled by Trump Tax cuts....